The Democrat-backing multimillionaire founding father of a “climate-friendly banking” startup — whose movie star buyers included Leonardo DiCaprio, Orlando Bloom and Drake — was arrested by federal authorities this week for allegedly conspiring to defraud buyers.
Joseph Neal Sanberg, a 45-year-old Orange County, Calif. resident who billed himself as an “anti-poverty advocate,” was taken into custody on Monday after he was alleged to have cheated two investor funds out of $145 million, in keeping with federal prosecutors.
Sanberg’s arrest got here after his alleged co-conspirator, Ibrahim Ameen AlHusseini, 51, of Venice, pleaded responsible to wire fraud after copping to receiving round $12.3 million in funds from the fraudulent scheme, prosecutors mentioned.
Sanberg co-founded Aspiration, a monetary providers firm selling sustainable and moral banking practices. Among the many backers of Aspiration are Hollywood stars Leonardo DiCaprio, Orlando Bloom, Cindy Crawford, the rapper Drake and Robert Downey Jr.
A spokesperson for DiCaprio declined to remark. The Publish has reached out to Bloom, Crawford, Drake and Downey.
Sanberg, whose information checklist addresses in California, New York and Greenwich, Conn., was an early investor in Blue Apron, a meal supply service.
In line with the Open Secrets and techniques web site, Sanberg has contributed 1000’s of {dollars} to varied Democrat-aligned causes over time.
Sanberg has given cash to candidates corresponding to former President Barack Obama, former Vice President Kamala Harris, Sen. Kirsten Gillibrand (D-NY), Sen. Jeff Merkley (D-Ore.), former Sen. Sherrod Brown (D-Ohio) and others.
Sanberg additionally based CalEITC4Me, a program aimed toward serving to low-income households in California declare earned revenue tax credit.
Prior to those authorized points, Sanberg was lively in political and social advocacy, significantly specializing in anti-poverty initiatives and efforts to boost the minimal wage in California to $18 an hour.
He had additionally been talked about as a possible political candidate, contemplating runs for workplaces such because the US Senate and even the presidency, although he didn’t formally enter these races.
AlHusseini has additionally been a prolific donor to Democrat causes — contributing cash to varied candidates corresponding to former Secretary of State Hillary Clinton in addition to Moveon.org, Finish Residents United and the Democratic Celebration of Wisconsin.
An legal professional for AlHusseini declined to remark. The Publish was unable to succeed in a consultant for Sanberg.
The legal case towards Sanberg facilities on the identical $145 million transaction that led to the October arrest of AlHusseini.
In line with prosecutors, buyers agreed to lend Sanberg cash primarily based on collateral within the type of Aspiration shares.
AlHusseini had dedicated to buying these shares if Sanberg defaulted. Nevertheless, Sanberg by no means repaid the mortgage and AlHusseini declined to purchase the shares as promised, it was alleged.
The buyers had relied on monetary statements indicating AlHusseini had ample funds to cowl the acquisition, however the FBI acknowledged in AlHusseini’s criticism that these financial institution information have been fraudulent.
Authorities included a comparability of 24 allegedly fabricated statements alongside real ones within the case paperwork.
In his plea settlement, AlHusseini admitted the monetary statements have been falsified and claimed Sanberg had orchestrated the scheme.
“At Sanberg’s direction, defendant made untrue statements,” prosecutors acknowledged within the submitting.
“Defendant and Sanberg knew that the falsified statements inflated the value of the assets in defendant’s accounts by tens of millions of dollars.”
Authorities allege AlHusseini obtained $12 million for backing the mortgage, with parts of that sum wired to Saudi Arabia, in keeping with the FBI’s criticism.
Revelations in regards to the questionable transactions emerged throughout a civil lawsuit wherein lenders sued each Sanberg and AlHusseini in New York state court docket.
The court docket in the end dominated towards them, issuing a $78 million judgment towards AlHusseini and a $209 million judgment towards Sanberg.
AlHusseini was arrested at an airport on Oct. 7 and held in custody as a flight danger after allegedly transferring $300 million to Saudi Arabia to keep away from the judgment.
He was later launched on bail in December, secured by distinguished liberal figures corresponding to CodePink founder Jodie Evans.
CodePink is a far-left antiwar group that has made headlines in latest months for protesting the Israel-Hamas struggle.
On Jan. 10, a New York choose discovered AlHusseini in contempt for spending cash on luxurious gadgets and political donations as an alternative of settling his debt.
The Each day Wire reported that costs towards AlHusseini have been dismissed on January 21.
His legal professional, John Lambert, acknowledged that AlHusseini’s “record has been dismissed pursuant to court order and all records related thereto have been destroyed.”
Nevertheless, prosecutor McNally clarified that the dismissal was a part of a broader cooperation settlement, stating, “The complaint against AlHusseini was dismissed to facilitate his cooperation in the prosecution of others, including Sanberg.”
He added that AlHusseini had “pleaded guilty today to an information charging him with wire fraud for falsifying documents and information to assist Sanberg.”
Paperwork unsealed Monday point out that AlHusseini was below FBI supervision as of Feb. 25.
He was additionally approved by the federal government to contact Aspiration executives, together with Sanberg and board chair Nate Redmond, in keeping with federal prosecutors.
“Our prosecutors and law enforcement partners have worked methodically to secure a guilty plea from one of the main offenders in this case and have now charged another member of the conspiracy,” Appearing United States Legal professional Joseph McNally mentioned.
“We will continue to ensure that markets and businesses receive an honest and level playing field in which to operate.”
Whereas the newest costs towards Sanberg revolve across the $145 million mortgage, his cooperation suggests potential additional authorized actions.
His monetary providers firm, Aspiration, has drawn scrutiny for its enterprise practices, with some evaluating it to the now-collapsed FTX.
Aspiration marketed “carbon credits” to firms, providing a approach to offset emissions. Nevertheless, skepticism has emerged over the legitimacy of such transactions, as hype and ideological enchantment might have influenced prospects’ choices.
Like FTX, Aspiration spent closely on promoting, together with a sponsorship cope with the LA Clippers.
On the top of progressive enthusiasm in 2021, the corporate aimed to go public at a $2 billion valuation. There are indications it might have manipulated monetary figures to help that valuation.
A Bloomberg investigation in July discovered proof that Sanberg had tried to inflate the corporate’s value by questionable monetary maneuvers.
Hundreds of thousands in reported revenue got here from an LLC as soon as registered to Sanberg, in keeping with the report.
One other deal recommended a nonprofit deliberate to pay Aspiration ten instances its annual income, whereas a separate transaction concerned a Colombian mannequin making month-to-month funds of $50,000 to Aspiration, solely to obtain an an identical sum from a Sanberg-affiliated entity.
Bloomberg additionally reported that Aspiration’s auditor severed ties with the corporate.
Aspiration’s try to go public by a SPAC collapsed in 2023, however not earlier than elevating $300 million from buyers, together with former Microsoft CEO Steve Ballmer.
Reviews point out that federal companies have been investigating Aspiration’s enterprise dealings.
In January, Bloomberg reported that the Division of Justice and the Commodity Futures Buying and selling Fee have been probing whether or not Aspiration misled prospects in regards to the validity of its carbon offsets.
ProPublica beforehand revealed that the corporate exaggerated its buyer base, claiming “5 million passionate members” when solely 500,000 accounts have been lively.
Aspiration additionally allegedly charged prospects a greenback per tree planted to fight local weather change, regardless of the price being just some cents.
Andrei Cherny, Sanberg’s co-founder who was ousted from Aspiration in 2021, has remained silent.
Cherny, a former advisor to Invoice Clinton and Al Gore, later pursued political workplace. In December, he sued Aspiration for unpaid compensation however withdrew the lawsuit weeks later.
Aspiration has not commented on the allegations, together with questions relating to the present standing of board chair Nate Redmond.
If convicted, Sanberg faces as much as 20 years in jail, as does AlHusseini.
The case is being investigated by the FBI and the US Postal Inspection Service.
